2005 (3) TMI 539 - AT - Central Excise

Summary

Issues:
1. Claim for refund of duty amounting to Rs. 51,660/- allowed but subsequently found to be erroneous.
2. Claim for refund of duty amounting to Rs. 1,54,691/- rejected due to lack of correlation between goods covered under Depot invoices and factory invoices.

Analysis:
1. The appellants, manufacturers of cotton yarn, sought a refund of duty amounting to Rs. 51,660/- as the consignment agent's invoice price was lower than the factory gate price. The refund was initially allowed but later deemed erroneous. The department issued a show cause notice for recovery, leading to adjudication by the original authority and subsequent affirmation by the Commissioner (Appeals) that the refund was erroneous due to the lack of correlation between goods covered under Depot and factory invoices. The appellants' contention that there was correlation quantitywise between the goods covered under the invoices was supported by the consignment agent's affidavit. However, the lower authorities found the evidence insufficient as neither invoice mentioned serial numbers of the cotton yarn bundles, a crucial detail in the textile industry. As a result, the claim for refund of Rs. 51,660/- was held to be without factual basis, and the appeals against this decision were dismissed.

2. In another instance, the appellants claimed a refund of duty amounting to Rs. 1,54,691/- for a different set of factory and Depot invoices for the same period. Similar to the previous case, the claim was rejected due to the lack of correlation between the goods covered under the invoices. The consignment agent's affidavit acknowledged the discrepancy in addresses on the invoices but asserted that goods were directly received from the factory and sold from the Depot. However, the affidavit did not provide sufficient particulars to establish complete correlation between the goods sold and received. The absence of serial numbers of cotton yarn bundles on the Depot invoices, as admitted by the appellants themselves, further weakened their case. The lower authorities upheld the rejection of the refund claim, emphasizing the importance of correlation between the invoices for substantiating refund requests. Consequently, the appeals challenging the decision on the Rs. 1,54,691/- refund claim were also dismissed.